Growth across the UK economy slowed to a near standstill in the third quarter, as weakness in manufacturing and faltering consumer demand dragged on output ahead of the autumn budget.
Gross domestic product (GDP) expanded by just 0.1% between July and September, down from 0.3% in the previous quarter, according to the Office for National Statistics. Adjusted for population, GDP per head showed no growth at all.
The services sector grew by 0.2%, construction edged up by 0.1%, while the production sector contracted by 0.5%. Monthly figures showed GDP falling by 0.1% in September, following flat output in August, revised down from an initial estimate of 0.1% growth, and a 0.1% decline in July.
The cyber-attack on Jaguar Land Rover in September was among the factors that hammered activity in the manufacturing sector.
The breach disrupted operations across roughly 5,000 organisations, including JLR’s network of affiliated dealerships, repair centres and hundreds of small parts and materials suppliers.
Production at the carmaker was halted on September 1 and remained largely suspended for five weeks, with factories only gradually returning to full capacity in October. The disruption was severe enough to trim 0.17 percentage points from UK economic growth in September.
ONS director of economic statistics Liz McKeown said: “Across the quarter as a whole manufacturing drove the weakness in production. There was a particularly marked fall in car production in September, reflecting the impact of a cyber incident, as well as a decline in the often-erratic pharmaceutical industry.”
The 0.1% growth recorded in July-September appears to be the slowest quarterly growth since the short recession in the second half of 2023.
The data comes as chancellor Rachel Reeves prepares to raise taxes in her upcoming budget to help plug a gap in the public finances of as much as £30bn. The planned fiscal tightening threatens to weigh further on an economy already showing signs of strain, with unemployment now at 5% and hiring slowing across key sectors.
Reeves said: “We had the fastest-growing economy in the G7 in the first half of the year, but there’s more to do to build an economy that works for working people.